TCS shares only gainer on Sensex in a falling market—Here is what's propelling this counter

Shares of Tata Consultancy Services (TCS) were the only gainers on the 30-share Sensex on Monday when all stocks were trading negative amid multiple factors, including geo-political tension between Russia and Ukraine.  

TCS stock surged more than 2 per cent in the early trade to day's high of Rs 3794.15 a share on the BSE after Tata Consultancy Services fixed February 23, 2022, as the record date for determining the entitlement of equity shareholders who will be eligible to participate in its Rs 18,000 crore buyback. 

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At 11.15 am, shares of IT giant were trading with gain of Rs 64.40 or 1.74% higher to Rs 3760 per share on the BSE.  

"The members of the Company have approved the Buyback by passing a special resolution through postal ballot. The Record Date for the purpose of determining the entitlement and the names of the equity shareholders who shall be eligible to participate in the Buyback," said the company in a BSE filing on Saturday, February 12. 

India's largest IT company Tata Consultancy Services (TCS) has announced Rs 18,000-crore buyback offer. The IT major will buyback 4 crore equity shares worth Rs 18,000 crore at a price of Rs 4,500 per share.    

What is buyback of shares?   

The buyback is a corporate action in which a company buys back its shares from the existing shareholders usually at a price higher than market price. When the company buys back its shares, the number of shares outstanding in the market reduces. A buyback allows companies to invest in themselves. By reducing the number of shares outstanding on the market, buybacks increase the proportion of shares a company owns. 

"Post buyback the outstanding share will reduce by 1.08%. Due to TCS’s sheer size, Rs.18000 crore buyback will have marginal uptick in EPS. However, the company’s commitment to add value to shareholder in growth and returning capital is appreciable. A short-term investor can consider the opportunity, while long-term investors can hold-on," Vinod Nair, Head of Research at Geojit Financial Services, had said when the offer was announced by the IT company.